Government to raise Rs.1,120 crore from divestment

The government will raise Rs.1,120 crore (Rs.11.2 billion/$224 million) this fiscal from sale of government equity in state-owned units, according to the budget papers Finance Minister Pranab Mukherjee presented in parliament Monday.

In 2009-10, "disinvestment proceeds have been estimated at Rs.1,120 crore which includes disinvestment of a small portion of equity in Rail India Technical and Economic Services (RITES), Cochin Ship Yard Ltd, Telecommunications Consultants India Ltd, Manganese Ore India Ltd, Rashtriya Ispat Nigam Ltd, and Satluj Jal Vidyut Nigam Ltd," the Receipts Budget 2009-10 said.

The document, however, did not mention the percentage of equity to be divested in each of the companies whose shares the government plans to sell during the current fiscal.

The Economic Survey for 2008-09 had recommended generating Rs.25,000 crore annually through sale of government equity in public sector undertakings.

This had raised market expectations that there could be some big ticket disinvestment announcement during the finance minister's budget speech. But Mukherjee's speech contained just one paragraph on the subject.

"The public sector undertakings are the wealth of the nation, and part of this wealth should rest in the hands of the people," Mukherjee said in his budget speech.

"While retaining at least 51 percent government equity in our enterprises, I propose to encourage people's participation in our disinvestment programme. Here, I must state clearly that public sector enterprises such as banks and insurance companies will remain in the public sector and will be given all support, including capital infusion, to grow and remain competitive," Mukherjee said.

Last updated on Jul 6^th, 2009 at 15:43 pm IST--IANS